Lowrance Reports First Quarter Results; Sales for Seasonally Weakest Quarter Increase 25%
TULSA, Okla.--Nov. 3, 20040, 2004--LOWRANCE ELECTRONICS, INC. announced today that the net loss for the fiscal 2005 first quarter ended October 31, 2004 was $1,705,000, or $0.39 per share, compared to a loss of $1,571,000, or $0.42 per share, for the first quarter of fiscal 2004. Net sales increased 25% to $17,475,000, compared to $14,036,000 in the same quarter last year.Darrell Lowrance, president and chief executive officer, said, "We have consistently increased the number of new product offerings in each of the last three years, and for fiscal 2005, the Company is bringing more than 50 new SONAR and GPS products to market. The continual introduction of new products helped increase first quarter sales by 25%, and gross margin by 30%, for our seasonally weakest quarter. Gross margin also increased to 37%, compared to 36% of sales, in the first quarter last year. Although operating expenses increased 25% to support this record number of new product introductions, Lowrance's first quarter operating loss still narrowed to 13% of sales from 14% of sales last year.
"We have accelerated new product introductions by the addition of an average of 19 new design engineers since the first quarter last year. Additionally, through the employment of leading edge manufacturing and design technologies, including Chip-on-Flex (COF), Chip-on-Glass (COG), System-on-Chip (SOC) and ASIC circuitry, we have improved product performance while simultaneously reducing material and manufacturing expenses. These enhanced engineering and manufacturing capabilities have differentiated our products and improved our competitive advantage in the marketplace," said Lowrance.
In the first quarter, Lowrance commenced shipping the award-winning iWay 500C, a versatile, portable, on-dash automotive GPS that uniquely adds MP3 player functions to precision, auto-routing, turn-by-turn navigation with visual and voice prompts. The iWay 500C, which comes with a full complement of accessories, was recently named "Best New Mobile Electronics Entertainment Product for 2005" at the Specialty Equipment Market Association (SEMA) 2004 Show in Las Vegas, Nevada, the premier automotive specialty products trade event in the world.
During the quarter, Lowrance completed a secondary public offering for 2,469,736 shares, which included an over-allotment option granted to the underwriter, JP Morgan Securities, Inc., at $24.00 per share. A total of 1,150,000 new shares were sold by the Company and the remaining shares were sold by stockholders. The Company now has 5,135,516 common shares outstanding.
About Lowrance Electronics
Lowrance Electronics, Inc. (www.lowrance.com), designs, manufactures and markets SONAR and GPS products, digital mapping systems and other accessories under the brand names "Lowrance,"(R) and "Eagle"(R) Electronics, "Lowrance Automotive(TM)" and "Lowrance Avionics"(R). These products are used in the following primary product markets: marine, general consumer (which includes outdoor recreational use and vehicular navigational systems for aftermarket automobile, RV and commercial markets) and aviation.
LOWRANCE ELECTRONICS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(in thousands, except per share information)(Unaudited)
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Three Months Ended
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October 31,
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2004 2003
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NET SALES $17,475 $14,036
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COST OF SALES 10,931 8,984
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Gross profit 6,544 5,052
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OPERATING EXPENSES:
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Selling and administrative 7,133 5,848
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Research and development 1,691 1,230
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Total operating expenses 8,824 7,078
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Operating loss (2,280) (2,026)
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OTHER EXPENSES:
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Interest expense 122 206
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Other, net 65 137
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Total other expenses 187 343
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LOSS BEFORE INCOME TAXES (2,467) (2,369)
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BENEFIT FOR INCOME TAXES (762) (798)
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NET LOSS $(1,705) $(1,571)
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NET LOSS PER COMMON SHARE:
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Basic and Diluted $(0.39) $(0.42)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
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Basic and Diluted 4,395 3,761
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DIVIDENDS $940 $940
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LOWRANCE ELECTRONICS, INC.
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CONSOLIDATED BALANCE SHEETS
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Oct. 31, Jul. 31,
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ASSETS 2004 2004
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(in thousands)
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CURRENT ASSETS:
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Cash and cash equivalents $3,565 $1,412
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Trade accounts receivable, net 8,079 10,276
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Inventories 39,599 23,821
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Current deferred income taxes 1,136 1,107
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Prepaid income taxes 2,854 --
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Prepaid expenses 2,563 2,041
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Total current assets 57,796 38,657
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PROPERTY, PLANT, AND EQUIPMENT, net 11,687 10,005
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OTHER ASSETS 590 81
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TOTAL ASSETS $70,073 $48,743
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
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Current maturities of long-term debt $1,417 $1,874
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Accounts payable 9,377 6,072
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Accrued liabilities:
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Compensation and benefits 2,426 3,175
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Product costs 2,215 1,968
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Accrued taxes 156 671
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Other 972 1,119
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Total current liabilities 16,563 14,879
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LONG-TERM DEBT, less current maturities 218 6,040
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DEFERRED INCOME TAXES 2,021 1,169
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STOCKHOLDERS' EQUITY:
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Common stock, $.10 par value, 10,000,000 shares
authorized;
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5,135,516 shares issued and outstanding at
October 31, 2004;
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3,761,196 shares issued and outstanding at July
31, 2004 514 377
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Paid-in capital 34,316 7,449
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Retained earnings 16,076 18,721
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Accumulated other comprehensive income 365 108
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Total stockholders' equity 51,271 26,655
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $70,073 $48,743
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